Europe and domestic worries keep stocks in check

The Dow and S&P 500 finish higher for the fourth day in a row; the Nasdaq dips. Macy's results impress. But Ralph Lauren and Priceline shares slump on worries about the global economy. Oil pulls back from $94; gold moves higher.

By Charley Blaine Aug 8, 2012 12:20PM
Charley BlaineUpdated: 5:17 p.m. ET

This is a cliche, but it's true. Bulls and bears battled all day for the soul of the stock market, but the bout ended basically in a draw.

The Dow Jones industrials ($INDU) and the Standard & Poor's 500 Index ($INX) managed to end higher for the fourth straight day, their first four-day gains since June.

But the Nasdaq Composite Index ($COMPX) came up short, due to a big loss in shares of Priceline.com (PCLN) and such key stocks as Expedia (EXPE), Oracle (ORCL) and Amazon.com (AMZN).

Priceline late Tuesday and rival Orbitz Worldwide (OWW) today warned that weakness in Europe and a rising dollar are going to press on earnings growth going forward. Europe also was a problem for fashion retailer Ralph Lauren (RL) and was a contributor to slowing July sales for McDonald's (MCD). 

The Dow closed up 7 points to 13,176. The S&P 500 was up 1 point to 1,402. The Nasdaq fell 5 points to 3,011. If you're a bull, however, you had to like that the S&P 500 finished above 1,400 and the Nasdaq closed above 3,000 for the second day in a row. The indexes had crossed those levels on Tuesday for the first time since May.

Article continues below.
The Nasdaq-100 Index ($NDX), which tracks the largest Nasdaq stocks, was off 3 points at 2,714. Apple (AAPL), the biggest influence on the index, was down $1.05 to $619.86.

After the close, News Corp. (NWSA) shares were down 0.5% to $23.60. Earnings of 32 cents a share were in line with estimates but down 4 cents from a year ago. Revenue of $8.37 billion was off 6.6% from a year ago and missed Street estimates by $360 million.

Monster Beverage (MNST) shares were down $8.27 to $59.50 after hours. Earnings of 59 cents a share were below the Street estimate of 62 cents. Revenue of $593 million was up 22% from a year ago, but it missed the consensus estimate by $3 million.

Europe helps reverse early selling
Europe was a big reason why U.S. stocks came back from their lows this morning. European stocks rebounded from early lows and finished basically flat on the day. Germany's Xetra Dax Index ($DE:DAX) was down as many as 61 points but rallied in the last 90 minutes of trading to finish off just 2 points to 6,966. The euro also bounced higher after falling to as low as $1.233.

The market has been rallying in recent weeks as expectations for action from the European Central Bank and the Federal Reserve grew. Economic data still point to lackluster demand worldwide, Reuters noted, and European central banks are projecting poor growth for coming quarters.

Some of that hope for the Fed making a big move faded today after Richard Fisher, president of the Federal Reserve Bank, told Bloomberg News the Fed has done enough easing. Plus, he said, central banks no longer have big-enough tools to make a difference.

Meanwhile, the Bank of England gave little indication that it would rush to pour in further stimulus even as it sharply cut its forecast for medium-term economic growth in Britain. France's central bank forecast a contraction in growth going into the third quarter, citing weak demand from the periphery and Britain.

Spanish benchmark 10-year yields briefly rose above 7%, underscoring the cautious tone from investors recently disappointed by lack of coordination from European officials in their efforts to reignite the economy.

The Labor Department will report on weekly jobless claims before Thursday's open, and the Commerce Department will report on the nation's trade balance for June.

Earnings are due from AMC Networks (AMCX), Elizabeth Arden (RDEN), for-profit education company DeVry (DV) and upscale department store operator Nordstrom (JWN).

Energy prices -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Crude oil (-CL)

$93.35

$93.67

9.88%

-5.54%
(per barrel)











Heating oil (-HO)

$3.0159

$2.9980

11.29%

3.49%
(per gallon)











Natural gas (-NG)

$2.9330

$2.9640

3.86%

-1.87%
(per mil. BTU)











Unleaded gasoline (-RB)

$2.9804

$2.9913

13.25%

12.15%
(per gallon)











Brent crude 

$111.97

$112.00

14.49%

4.27%
(per barrel)











Retail gasoline

$3.6470

$3.6340

9.29%

11.32%
(per gallon; AAA)












Hewlett-Packard boosts earning guidance, expects big write-down
Hewlett-Packard (HPQ), up 45 cents to $19.41, was the top performer among the 30 Dow stocks after raising its guidance for the fiscal third quarter.

But the company also said it will write down the value of its services segment by about $8 billion, underscoring the division's struggles and how much the company overpaid for Electronic Data Systems in 2008. HP bought the company for some $13 billion.

McDonald's flat sales
McDonald's was the Dow's worst performer, down $1.48 to $87.53, after the fast-food giant reported flat same-store sales for July. The decline trimmed the Dow by about 10 points.

The measure, which charts revenue from outlets open at least a year, is a key indicator for retailers. U.S. sales were off 0.1%, with European sales down 0.6% and Asian sales down 1.5%. It was the worst monthly same-store sales report in nine years, Reuters said.

McDonald's had warned in June that it was seeing the global economy weigh on its business.
.
"We've grown used to seeing McDonald's weather bad economies, so this is a bit of a surprise," RBC Capital analyst Larry Miller told Reuters.

Priceline and Orbitz see struggles from Europe
Priceline, down $117.48 to $562.32, reported late Tuesday a rare quarter of lower-than-expected revenue and predicted stark deceleration to come. "Concerns related to sovereign debt and the viability of the euro have negatively impacted historical operating results and are likely to impact future results," the company said.

Priceline was the biggest loser among stocks in both the S&P 500 and Nasdaq-100.

Orbitz, meanwhile, was off $1.19 to $3.47. The company earned $4.6 million, or 4 cents per share, compared with $8.9 million, or 8 cents per share, a year ago. Revenue fell just slightly to $200.9 million from $201.8 million last year. But the company had expected revenue gains.

It sees $197 million to $203 million in revenue for the third quarter; Wall Street has been looking for $216.3 million. The outlook, the company said, "reflects the deterioration in economic conditions in Europe, weaker air volume in the U.S. online travel company channel and foreign exchange head winds."

Rivals Expedia (EXPE) and Tripadvisor (TRIP) were also off sharply today in response to the two reports.

A middling market
Nineteen of the 30 Dow stocks were higher, led by Hewlett-Packard, Alcoa (AA) and Walt Disney (DIS), which reported strong earnings late Tuesday.

McDonald's and United Technologies (UTX) were the laggards.

A total of 271 S&P 500 stocks were higher, led  by Dean Foods (DF), Computer Sciences (CSC), and International Flavors and Fragrances (IFF).

Alpha Natural Resources and Trip Advisor were the laggards after Priceline.

Fifty-six Nasdaq-100 stocks were higher. The winners were Express Scripts (ESRX) and Sirius XM Radio (SIRI). Priceline.com and Warner Chilcott (WCRX) were the laggards.

Oil pulls back; gold pushes higher
Oil prices were higher for much of the day, but are pulling back after the Energy Department reported lower-than-expected demand.

Crude oil
(-CL) in New York settled down 32 cents to $93.35 a barrel. It had peaked at $94.72. The national average retail price of gasoline hit $3.647 a gallon, up from Tuesday's $3.634 a gallon, according to AAA's Daily Fuel Gauge Report. The price has risen 9.3% since June 30.

Gold
(-GC) settled at $1,616 an ounce, up $3.20. Silver (-SI) and copper (-HG) were lower.

Short hits from the markets -- New York close



Wed.

Tues.

Month chg.

YTD chg.
Treasury yields











13-week Treasury bill

0.1000%

0.090%

0.00%

900.00%
5-year Treasury note 

0.719%

0.703%

20.03%

-13.37%
10-year Treasury note

1.640%

1.628%

-1.15%

-12.35%
30-year Treasury bond

2.740%

2.719%

-0.83%

-5.16%
Currencies











U.S. Dollar Index

82.439

82.250

0.84%

2.38%
British pound

1.5657

1.5627

-0.30%

0.77%
(in U.S. $)

 








U.S. $ in pounds

£0.639

£0.640

0.30%

-0.76%
Euro in dollars

$1.24

$1.24

-2.08%

-4.60%
(in U.S. $)

 








U.S. $ in euros

€ 0.809

€ 0.806

2.12%

4.82%
U.S. $ in yen 

78.68

78.60

-1.34%

2.05%
U.S. $ in Chinese

6.38

6.36

0.20%

0.93%
yuan











Canada dollar

$1.006

$1.004

2.37%

2.52%
(in U.S. $)

 








U.S. dollar 

$0.995

$0.996

-2.31%

-2.46%
(in Canadian $)

 








Commodities

 

 

 

 
Gold (-GC)

$1,616.00

$1,612.80

0.74%

3.14%
(per troy ounce)

 








Copper (-HG)

$3.422

$3.441

-2.15%

-0.42%
(per pound)

 








Silver (-SI)

$28.0750

$28.0860

1.68%

0.57%
(per troy ounce)

 








Wheat (-ZW)

$8.8900

$8.8900

17.40%

36.19%
(per bushel)

 








Corn (-ZC)

$8.0050

$8.005

26.11%

23.82%
(per bushel)

 








Cotton 

$0.7600

0.754

6.55%

-17.10%
(per pound)

 








Coffee

$1.7050

1.7265

-0.12%

-25.76%
(per pound)

 








Crude oil (-CL)

$93.35

$93.67

9.88%

-5.54%
(per barrel)










 

274Comments
Aug 8, 2012 2:41PM
avatar
wasn't gas above 3.50  when it was 112 a barrel, today 94 a barrel and over $3.50, what's up with this/
Aug 8, 2012 3:20PM
avatar
On the news last night, I saw a headline - "triple dip recession".
How ridiculous is this getting?
We've been in a recession for several years. There's no such thing as a jobless recovery, no matter what the fake market indicates.

Aug 8, 2012 1:55PM
avatar
It makes not one iota of a difference is the "Dow" hits whatever.  We are in a worldwide depression right now.  Your K's and pensions are being raped right in front of your eyes. Wake up!  There are no "positive" indicators.....none!  It is impossible for me to believe that this is being allowed.  Gustavo..... what the H are you "planting" in you your "cemented" yard upstairs.  My lord...you cannot be this stupid. 
Aug 8, 2012 12:45PM
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Up down up down.......high hopes to ultimately a total let down!!!!! People need to wake up and worry about the long haul not the short gains!!!!!!
Aug 8, 2012 1:51PM
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I know there is buzz about who the GOP VP pick will be, but if I were President Obama I would be looking for mine.
Aug 8, 2012 2:01PM
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I see some posts here about the .com bubble market. You could buy stocks for web sites that were "under construction". You could even make some money if you got out fast on those. 
No too different than todays market. You can make some money if you are carefull.
The difference is small between the 2 markets then and now.
One you could speculate that the .com you purchased would pan out and today you can speculate that your government will deface the dollar.
Aug 8, 2012 1:04PM
avatar
short term gains are the new american way! 
Aug 8, 2012 7:08PM
avatar

IN CASE YOU DIDN'T KNOW:

 

 

Q: What the difference between the Obama supporters and the Romney supporters?

 

A: Romney supporters sign their checks on the front, and Obama supporters sign their checks on the back

 

...yuk!

Aug 8, 2012 3:47PM
avatar
Someone farts at the Fed or ECB and brokers flock for a sniff.  Brokers are actually the lowest form of flying monkey. 
Aug 8, 2012 5:12PM
avatar
I told you guys I am waiting for the white house leaks to get Obama's college transcripts.
Aug 8, 2012 1:55PM
avatar
Should go into the red about 3:00 or so unless China announces that they have come out with a new 6G Ikum liquid latex "Dip N Play" condom maker.   
Aug 8, 2012 10:31PM
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I mean stop with this ****!  The net is not infallible by any stretch of anyones' imagaination.  Someone actually put up a site with all the "****".  Lord have mercy!  We are dumbing down more and more and not just the kids!!!!!  What the H is going on!

 

The "markets" are "rigged".....you have to be absolutely brain-dead not to see it!

Aug 8, 2012 6:01PM
avatar

What's so funny about peace, love, and understanding?????

 

I wish the Obama supporters weren't so hateful.

Aug 8, 2012 1:55PM
avatar
 What was the unemployment rate in 1936 and 1940? And yet FDR got reelected by landslides both times despite his inefficient fixes. History likes to repeat itself
Aug 8, 2012 12:38PM
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 Spanish T bill rates are climbing, not falling at 7% again and Italy right around 6. How come? I thought they had a fix? They are the only statistics from Europe  i pay attention to now.  Shows what the skeptics think minus the spin
Aug 8, 2012 7:57PM
avatar
I think it is odd, they have all these white house leaks and are so tight lipped about Obama's past.
Aug 8, 2012 2:00PM
avatar
 Super Computer says who care what the economic conditions are there is ALWAYS money to be made if you look in the right places. Not by you dumb humans of course! Too emotional and slow. 
Aug 8, 2012 4:23PM
avatar

SSG:

 

I think it is hopeless to bring up facts and try and reason with a guy like Pete.

 

Seriously, I understand people have political affiliations, but for a person, like Pete, to just check his brain at the door of a political party is disturbing.  I certainly hope that he is a very, very, very small segment of our population, or else we are in more trouble than I imagined.

 

He doesn't care about accuracy, he is simply going to blame a Repub for every problem that we have ever had.  I don't do that with Dems.  First, I realize that THE IDEOLOGY is what is important, not the party label.   

 

That is why a guy like John McCain, is not a very good candidate. He might wear the Repub label, but he could very easily be a Dem, based on his views and ideology. 

 

Not everything bad, economic or otherwise, that has occurred in this country is because of the Dem label.  However, the one constant of the past 100 years, is that our nation and Europe have become more and more left leaning liberal.  We can all see the results of that and draw our own conclusions.

 

Bush II's average uemployment over his 8 years, was 5%.  That's pretty good, much better than today.  Things went south during 2008, for a variety of reasons, not all Bush's fault.  However, in my opinion, what Bush did wrong at the end was to IMPLEMENT LIBERAL ORIENTED POLICIES. 

 

So, if someone wants to blame Bush, they should not blame him because of THE REPUBL LABEL, BUT BECAUSE  OF THE LIBERAL POLICIES. 

  

Aug 8, 2012 6:54PM
avatar

Stock Market..............go to sleep for good.............we don't care about thieves.

Now. let me ask you this: Does anyone know for sure who Obama really is? Besides the fake birth certificate being born in Honolulu while his mother was in Kenya.........?%&@......what do you make of this?

Where are his college degrees reports? He declares himself a gay president...like he voted no before he voted yes. It is inconceivable to really understand why so many dumbs voted for this guy. I call him the OCCUPIER of the HALF WAY HOUSE.

Morale: if Obama keeps his job in November, you will lose yours.

Aug 8, 2012 6:18PM
avatar
I lived in MA when Romney was Governor, He won in  03 if I can remember correct. He did reduced the decficit about 3 billion. I lived in western MA. A lot of the money went to Boston, because of the big dig. He passed the healthcare for MA, however that was a lot of Kennedy's ideas. I would have to say he was a good governor.
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